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An increasing number of us in the building find our board president to be reckless (he acts unilaterally and does things that some of us fear could be actionable) and have been hoping that he will eventually be voted off the board altogether. (Two of his fellow board members requested earlier this year that he step aside and assume the role of treasurer, for which he seems better suited, but he refused, stating that he would only serve on the board if he could be its president.)
The past couple of years, apparently afraid that he would not be re-elected, this man has pulled out all of the stops come election time: securing the sponsor's vote, buttonholing individual shareholders and misrepresenting situations within the board, etc. Last year he had the building's managing agent, who seems to have an inordinate interest in seeing the president remain in his position, sing his praises before the election: "The building never could have made such strides without the extraordinary leadership of X." Although I voted for him in that election, I was made uncomfortable by the managing agent's endorsement of any one candidate. For this year's election, the board president made the unilateral decision (he did not consult the rest of the board) to have the building's accountant come and give a presentation before the election. This was a first for our building: usually the accountant gives a presentation only to the board, which seems more practical. Those who attended tell me that it was a very positive report that ended with the accountant stating: "Your building is extraordinarily well managed." Again, that amounts to an endorsement of the status quo by a seemingly neutral party.
While these tactics strike some of us as "strategery" and seem almost comically desperate, they are probably not unheard of and, though underhanded, could not be considered improper. But something happened recently that does raise questions for me. Although I had been planning to attend our recent annual shareholders' meeting, something came up at the last minute and I realized that I would need to be in another part of the city just an hour after our meeting began. So, after work I went back to my building and, shortly before the meeting started, approached the managing agent. I explained my situation and said that I wanted to designate one of the board members as my proxy. The managing agent gave me a proxy form and talked me through filling it out, going so far as to spell the board member's last name for me. After I finished signing and dating it, I gave it to the managing agent, who assured me that she would give it to the board member as soon as she arrived. I thanked her and left for my other meeting.
Last week I had dinner with this board member and asked her how the meeting went. She told me that this year some board members had requested that an impartial shareholder watch the managing agent tabulate the votes. When I thanked her for serving as my proxy, she looked at me blankly. The managing agent never gave her my proxy form! I'm stunned. The shareholder who helped count wouldn't be apt to notice if a given proxy was missing or forged. It seems to me that I have a right to vote, and I went to a lot of trouble to get back to the building after work so that I could fill out a proxy form. It's clear that the managing agent for whatever reason has a vested interest in ensuring that our board president remains on the board, and she certainly knew how my designated proxy would vote. This just doesn't seem right to me. Also, for me, it really undermines the whole election. And, it seems to beg the question: if the board president and managing agent think nothing of doing stuff like this, what else might they be up to? Do I have any recourse?
(The board member whom I designated as my proxy recently asked this question at the tail end of an older thread, but so far no one has responded. I decided to post the question as a new message and from my point of view, since I really am quite troubled by this. I'm not sure how common this sort of thing is or what if anything can be done about it, and would appreciate any feedback.)
Having the Accountant at the meeting is always prudent. It adds to the Boards show of efforts in the financial area, permits shareholders to express concerns or ask questions with regard to the audited financials (which they should have well before the meeting, and some extra as AdC stated). Many times there are questions that a Board member just cannot answer like the accountant can (or should).
The Board hires the managing agent, the Board president typically runs the Board (sometimes unilaterally), most managing agents have, or feel they must be subordinate to the Board president. I had a building with a dishonest Board president, and when I assisted other Board members in exposing the infractions, the same person was elected (who knows maybe out of fear?), and I was soon asked to be removed from the building. If I had to do it again, I would, but different. Most managers would not, and would follow what "the boss" says to protect their self and/or the account. It is wrong, but done. (I feel I work for the Corporation & the building, not the Board; the Board is a conduit for direction)
Not that it rights a wrong, but would your vote have made a difference in the election results? If so, then maybe you should act. If not, learn from this election and prepare yourself and any consortiums for the next one. I would also confront the manager privately and inquire why your proxy was left out.
As AdC points out, even if he is elected again to the Board, who then elects him as President? It seems to me that the bigger challenge here is getting people to speak up and stand up for what is right. Herein may lie your calling...
So many ways to skin this cat..
~AR
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"seems to me that the bigger challenge here is getting people to speak up and stand up for what is right. Herein may lie your calling..."
As a board president, I am frustrated by three fundamental issues:
(1) Board members' and, ultimately, shareholders' inability to stand in their legs and basically say in an simple and civil manner and without fear what they think about ISSUES, NOT PEOPLE. As a result of board members' secret phantoms (fear of not being liked, fear of being wrong, fear of being judged stupid, not smart or too backwards, fear of...) there is no discourse and ultimately no growth and progress for the co-op. Consequently, board end following the "bully", the "dearing", the "fearless leader" and depending on the good or bad intentions of the individual in question.
Board members are leaders and workers. Consequently, keeping silent, acting in block (rather than INDEPENDENT THINKERS) or applauding the "elocuent speaker" without questioning or challenging when necessary or adding to the discourse accomplishes nothing for the CO-op which they serve.
(2) Board members who DO NOT make an effort EDUCATE themselves by reading.
(3) Board members who ARE NOT willing to sacrifice and share the burden of the work just because "Managment" is supposed to do ALL. Board members who are elected, but squarely refuse to be delegated a function, "I cannot do anything from my work or I have a busy life after work" WELL, what about your lunch time?... WHY are you on the board?
Thanks again for sharing from the management point of view.
AdC
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Thanks a lot for your responses, everyone.
Yes, there is a lot of bullying and a lot of fear and a lot of head-hiding-in-sand going on here.
As in most buildings, people are elected to the board by the shareholders; then individual officers are appointed by their peers on the board. Basically. My understanding of how the current president became president is that, a few years ago, in the middle of the term, he suggested that he replace the guy who was then serving as president because he was convinced that he could do a better job. There was a bit of a struggle but eventually the bully prevailed. He's one of those people who screams the loudest and the longest and that's how he gets things done. (He has even said as much.) Seems pretty amateurish to me, but...
During the most recent term, he suggested that he remain president because he was the only one with access to certain information and people, and he was already the president, and so he should just remain president, yadda yadda yadda. The three other board members are pretty accommodating and said: "This seems to be really important to you, go for it." But during the course of the term, the three other members realized that the president was out of control. In one instance, he misrepresented "information" he had gotten about a buy packet. He didn't want someone in the building, so he sent an email to the other members saying that he had heard from the realtor that the applicant had lied about his employment situation and that he (the president) recommended rejecting the applicant on the basis of that "information." Two of the other board members strongly objected to this way of doing business, stating that any questions about an application should be resolved by contacting the applicant's employer and the applicant directly, not relying on hearsay. This made the president furious, and he sent one of the board members a private email saying that he was "keeping track" of the times she had disagreed with him, that he didn't much care for it, that she should keep quiet and not question his actions--and that she should not show his email to anyone. The two concerned board members contacted the applicant's employer directly the following day; the employer confirmed that the applicant had accurately represented his employment situation. The board members followed up by contacting the realtor, who spoke very highly of the applicant and presented a much different picture than the one relayed by the board president. Confronted with his misrepresentation, the president threw a tantrum, saying: "How dare you say that my behavior was inappropriate? How dare you question my honesty? I don't give a f*ck--I don't wanna be president anymore!" The three other board members requested an emergency meeting to discuss the matter. The president refused to attend. At the meeting, two of the officers asked the VP, who has lots of management experience and natural leadership qualities, to assume the role of president. The VP, who has a sense of loyalty because his wife and the president's wife are good friends, felt uneasy about such a move and declined, and ultimately the status quo was maintained. (By the way, that buyer was accepted in a vote of three to one.)
After a few more similar upheavals, a special meeting was called to request that the president step aside. By that point, the VP was willing to assume the role of president--but only on the condition that the president agree to such a shift. Naturally the president didn't agree, saying that he would only be on the board if he could be the president. So the board was deadlocked two-two and the status quo was maintained. At the end of the term, the two most disgusted board members stepped down and this man was re-elected. Would my vote have made a difference? I don't know.
My initial impulse was to send the managing agent a private email asking her what happened, but my experience with her suggests that she would just blow off the email. Should I send her an email and cc the man who is currently (still) the VP? Although he doesn't like conflict, he is definitely honest and wants to do the right thing, and I can't imagine he would be happy to learn that this sort of thing was going on. Or, should I have my attorney send a certified letter to the managing agent and a copy to the current board?
I have a nagging feeling that this proxy tampering is just the tip of the iceberg.
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Sorry for my frank and blunt advice.
Do nothing. YOu obviously seem to know to know the court intrigues. Thus, you should run for elections next year, commit to it, volunteer to be president and have the "faint of heart" elect you as president.
So, end of the intrigue, end of the wild president, and move on in a more straightfoward form of government.
Conclusion: Don't complain, but act. Otherwise, no sense to keep going with the same intrigue. For your info, it applies to your board members too! Let them know that.
AdC
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Your advice is pragmatic, AdC; thanks. I suspect you have a stronger stomach than I do, though. I had indeed been considering running for the board, because the president had stated that he would not run for re-election. At the last minute, however, he decided to run, and I withdrew my name. I'm very happy to volunteer for committees, but I simply won't put myself in a situation where I have to deal with this man any more than I have to. I guess that's a bad attitude, but I just can't have that nonsense in my life.
There has been very high turnover on this board. The people who are trying to "move on in a more straightforward form of government" simply give up, ultimately. And they aren't people who would ordinarily be considered "faint of heart."
Sorry to complain; I just thought that there might be a procedure to follow in the case of a proxy that gets stolen or thrown out by a managing agent.
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Perhaps you shoud listen to the song and get some courage just like those whom you deem "not to be faint of heart."
Unfortunately, when one thinks that a situation may be corrected and you may aid to the transition, you should plunge to the task. Otherwise, smile and let others impose their will. However, don't criticize because you are not willing to take the punch or the sacrifice.
In my case, I felt that the president who represented the building was going to do something that was against the interest of the co-op and told her at a board meeting the reasons why she should step down as the president and let another person take over the presidency for obvious reasons.
The dialog and reasons on both sides went on for during two meetings in front of all the board members (all green on board affairs including me). Although the other board members felt like me regarding the continuation as a president of this board member, they did not immediately jump on the bandwagon; they listened first, then became vocal in their feelings and finally every board member requested the president to step down in her capacity.
The peson continued be a board member; altnough she became a formidable opposer, to this day I ADMIRE her attitude for providing valuable feedback and even agree with most of the decisions we made on behalf of the co-op.
For your information, we were the first all women board the building had. I don't think many vendors including the union knew how to deal with an all women board. We prevailed in many areas because what united us was the need to improve the co-op on all aspects. I think the board was so spontaneous and the spirit to good and even the sponsor representative (another woman) was highly supportive and we were able to learn from her experience and gain tons from her goodwill.
AdC
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Someone had to defeat the Roman army..
Someone has to overthrow terrorist governments..
and Someone has to step up to be the leader they were ment to be. fact is, if it is bothering you this much, you do have it in you to achieve not only a successful outcome, but to obtain the support you need and run the Coop as it should be.
Galatians 6:9 - And let us not be weary in well doing: for in due season we shall reap, if we faint not.
just thought I'd toss that in!
AR
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GK - If you and other owners feel your board president is out of control, you should, and can, do something about it. Your vote will make a difference. That's what the power of the vote is all about. Look for new candidates to run for the board. Make the president's wrongdoings known to all owners - IF you can prove it with solid evidence. If he is out of control, take control in a democratic way and work actively to get him removed from office.
We've avoided a 2-2 deadlock on certain board issues by appointing our coop attorney as assistant board secretary, and he can vote as a board member. If, for ex, your vote is 2-2 to have the VP replace the president, the attorney's vote would be the tiebreaker. If your president is truly out of control, the attorney would/should vote in favor of the VP since he is duty-bound anyway to act in the best interests of the coop.
Re: one point you noted, you settled the issue of whether a buyer lied about his employment by having 2 board members call the realtor and employer who confirmed his employment. Doesn't your sale package include a letter of confirmation from a sale applicant's employer and 3 business reference letters? It should. Credit reports also include employment verification. If there's a question and if a buyer pays a "sale package processing fee" to mgmt, your mgmt office should make any necessary calls to employers, banks, to confirm any info. That's part of what they're paid a fee to do. There's no reason to rely on hearsay from your board president, or any board member.
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BP, I appreciate your positive response, and I want to believe it but--
"Your vote will make a difference."
It's hard for me to believe that my vote will make a difference when the managing agent essentially threw it away because she knew that the person I had designated as my proxy would not vote for the current president. Frankly I find this situation demoralizing.
"Look for new candidates to run for the board. Make the president's wrongdoings known to all owners"
We tried. It apparently made no difference, even though supposedly the election was close. The meeting was poorly attended this year; plus the president had all of the sponsor's votes. Before this recent election he bragged to some shareholders that he got "twice as many votes as [x board member] last year." Which I guess is fairly easy when you have all of the sponsor's votes.
"IF you can prove it with solid evidence."
It's all in the emails. Thank god for email.
"If your president is truly out of control, the attorney would/should vote in favor of the VP since he is duty-bound anyway to act in the best interests of the coop."
Interesting idea. The only potential problem I see is that the president has created a situation where only he has any communication with the attorney.
"Doesn't your sale package include a letter of confirmation from a sale applicant's employer and 3 business reference letters? It should."
Yes. The applicant stated that he had received a recent promotion and substantial salary increase (which wasn't reflected in the W2s but was reflected in the employer's letter as well as in the final pay stubs); the president emailed the board that the realtor had told him that the promotion had fallen through and that the applicant was misrepresenting his situation. In fact the realtor never said this; the board president just made it up. It's not the only time he got caught distorting facts, just the most egregious example. And it's escalating: this man recently joined the community board, which means that he will be engaging in his divisive, back-channel tactics on a much larger scale.
Thanks again for your response, BP.
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You stated, "...this man recently joined the community board, which means that he will be engaging in his divisive, back-channel tactics on a much larger scale."
As a member of a Community Board myself, please allow me to correct you on one point - that he "joined" a CB; all members are appointed. You might want to find out who appointed him and approach them with proof of your concerns. That individual might/might not reappoint at the end of the term.
That having been said, I certainly pray it's not MY community board he's on!
I hope you will start now to prepare for NEXT year's election so this person is not re-elected. Good luck!
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Thanks for the clarification. I'm fairly certain I know who appointed him; it's someone I've known for years.
If this man were on your community board, you would know it.
I AM going to start now to prepare for next year's election. I'll need to be smart about how I go about it, however.
Thanks for your feedback.
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GK - It is a tough nut to crack if your board president has the sponsor's votes, especially if that represents a lot of shares. We had that problem, but we worked through it. And our sponsor has been selling and his shares aren't many anymore. But you CAN change things. A few suggestions:
1) Get any help you can from other board members who don't like what the president's doing and want him out.
2) Get your apathetic Shs more involved and concerned. If possible, tell them about any ways that "financials" may be misused or mismanaged by the president and/or mgmt. Shs react if they know/suspect their funds aren't used properly or if they are being hit in the wallet for maint increases, assessments, etc. needlessly or too often. That's one way to shake them up, and once you do you can shake them up about other things too.
3) Request a "special meeting". If you're not familiar with this, let me know and I'll explain how that works. If you can rally your Shs, you can ask the president very pointed questions at a special meeting. For ex, ask why a proxy you were named on was thrown out by mgmt. You know if it wasn't used if you weren't given the chance to vote those shares. Maybe it happened with other proxies too. They don't have to be sent to mgmt. They can be given to the appointee and brought to the annual meeting. Make a case about this. I know Shs who keep a photocopy of proxies they are named on.
4) This involves getting a resolution put forth, amending the by-laws, and a vote by all Shs - but if you get enough Sh support and have board members on your side, you can get the president out if you have board "term limits". Maybe you already do. Check your by-laws.
GK, if this "presidential wrongdoing" is important enough to you, you can make a difference. But it requires effort. AR - Nice quote from Galatians that we shall reap if we faint not. Here's another one, GK. Maybe not as eloquent, but it always helps me remember what I need to do.
Over my desk I have a piece of paper on a bulletin board. On it is just a simple straight line on a steep angle going from left to right, and under the line are these words:
"Nothing slides uphill."
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"We had that problem, but we worked through it."
May I ask how you worked through it? The number of sponsor shares in our building is rapidly dwindling, but it still represents a sizable block.
"Get any help you can from other board members who don't like what the president's doing and want him out."
All three of his fellow board members found him problematic during the last term, but because of the personal issue (i.e., VP's wife and president's wife are close friends), the VP would never take a firm stand and the board was always deadlocked two-two. The VP is still on the board this year; I don't know the two new members. It will be interesting to see how that dynamic plays out. The board is in the honeymoon phase now, but my prediction is that the two new members will be alienated fairly quickly. The president has demonstrated PATTERNS of behavior (unilateral action, misrepresentation, back-channel tactics, divisiveness) that seem compulsive. He can't help himself. He can't stop. He can't not act out.
We've all seen people like this. Right? This is a Jeff Skilling type of person. A tragic character. Eventually they go down in flames. What's truly tragic in cases like that is the fallout, which I would like to minimize if at all possible.
But I will need to be extremely careful. We're not just talking about a difficult person here. We're talking about a frightening person.
"Request a special meeting."
I am familiar with this and this was considered. Ultimately we felt that it would be too polarizing and disruptive.
"You can get the president out if you have board term limits."
I'm all for term limits. Five years is long enough for any one person to be president. He'll never go for it, of course. Yes, I would like to try to pursue that. Other shareholders have raised the issue, so perhaps there is fertile ground there.
I really appreciate all of this feedback. I've done so much reading on this topic over the past week that I'm feeling a bit saturated and am having trouble remembering where I read what. SOMEWHERE I read that there is a clear protocol on how proxies should be dealt with (I think I read that they should be accounted for at the beginning of the annual meeting).
Here's how I think I would like to proceed.
1. Send an email to the managing agent (and cc my designated proxy, as well as the current board VP) documenting her mishandling of my proxy and holding her accountable for that.
2. Once that has been documented, suggest to the VP that, for the next election, an impartial third party like HBA be brought in to monitor each step of the process.
The key words here are "each step of the process." That's where we were too trusting in this last election. We thought that it was enough to have an impartial shareholder help the managing agent tabulate the votes.
Finally, thanks to AR and BP for the quotes. The one over my desk reads: "Do not become enamored of power." (Michel Foucault)
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Put EVERYTHING, everything in writing. Have all votes noted in the min, and if you see that something is very wrong, write the Shareholders. Stress on them that its THEIR money the Board is spending. If thier maint is going to be raised, they will be intrested. All you need is one or two other shareholders to push this change through.
We got rid of a Super who, had been caugh stealing, doing major renovations without permits and the building was filty. He was doing favors for board members -- and they, even after 99% of the SH raised thier hands in fav of fireing him, refused to fire him. ONE board member bravely stepped out, became a whisle-blower and wrote a letter to the SH. The board was forced into firing him.
The Paper/Email trail is your best defense and offense.
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Yes. Document, document, document.
"Have all votes noted in the min, and if you see that something is very wrong, write the Shareholders."
What do you mean exactly by this? You mean how many votes each candidate received?
Thanks for your response. I've been reading through some of your posts and I have a better understanding now of what your building has been through.
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It is great that this worked for you. In my coop several sahereholders have written & exposed corrupted board members to no avail. How does one deal with apathetic shareholders who see & hear no evil. Even when given assessment & increase after increase, they continue in their slumber.
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Even when given assessment & increase after increase,...
Is this an indication of corruption on the part of the board?
Don't you think that a board member who is a shareholder is also committed to pay increased maintenance and assessment?
What does corrupt mean to you?
There isn't that much money to make in a coop to have your reputation ruined for a few dollars. You may call your board ignorant, power or not so power driven, opportunits, etc. but to say "corrupt" you need to substnatiate it with very specific proof.
AdC
AdC
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"O" -
If you have Shs who see/hear no evil even if corruption or other wrongdoing by board members is supported by evidence and thrown in their faces, they probably don't understand it or know how to deal with it.
If you have Shs who don't gripe about repeated maintenance increases or assessments, maybe they have so much money they don't care (unlikely!), or they know the coop is in bad shape financially and rising charges are necessary, or they complained about things in the past and got nowhere so they figure there's no point to complaining about this.
Apathy can defeat the best intentions and plans. Once it sets in and gets deeply rooted, it's hard to overcome. The best thing to do (my opinion) is get off Apathy Road at the first exit and slowly find a new route to where you want to go. De-emphasize negatives. Stress positives. Work toward better communication with Shs and when you see a glimmer of reaction from them, respond to it. Work to re-build their confidence and interest in the coop. Show them that what they think, want or don't want matters. Don't focus so much on getting them on your side. Focus on letting them know you're on their side and decisions made will benefit them.
Sounds good, huh? It can be done. That's my philosophy lecture for the day. :-)
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Sorry to disagree with you AdC but there is massive theft from coops/condos and the bigger and richer they are the more there is to take - I am in a very poor coop, yet over $100,000 a year disappears top line - this is how
1) the management company says it writes checks to pay xxx, but those payments are not really made, and then the accountant overstates the expenses in the financials a)how many people on your boards look at the financial information and then do they check the disbursement ledger against the bills, are they given the bills?
2) what about capital improvements, roof, garage, lobby - try contracts to begin with a double what they should and then unforseen circumstances that double it again and then you get subpar materials and labor, and repairs must be made immediately - that is many hundreds of thousands per contract
3) what about regular repairs and supplies - what are the kickbacks on those -
Do you really think this is not prevalent - it is and the reason why is that the District Attorney and the Attorney General's office will do nothing so the management company, certain board members, accountant, contractors, suppliers are very happy - and you cannot do anything unless you wish to start a lawsuit which starts at $100,000 a year
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I do not disagree with you regarding your points, but I object to the hersay and light statements. The calling of a corrupt board with an example of increasing maintenance and assessment, does not equate unless you bring other deeper issues that deal with general check and balances that a board must establish, adopt or question as part of co-op operations. To wake up one day and say, Ï was robbed, is not enough! As you mentioned in your article, what board member checks your paid invoices against your checks. Again, it's a problem of SERVICE more than title on the part of the board.
For each item you wrote below, there is fiduciary responsibity to assume by the board to ascertain that they are not being taken for a ride. Of course, the bottom line is WHO IS WILLING TO SACRIFICE? Who will SERVICE and who will want to be SERVED? This is where shareholders must exercise their prudence and not just vote for a nice facade.
Example:
In the case of #2, you do what is required of a board: get a reputable engineering company after selecting from several candidates. Check their references, have the engineering company prepare the close bid package, and do the due diligence required for those bidders that you feel fall within your budget. Hire the engineer to do your routine inspections of the construction and have the board involved in the process through project reviews. QUESTION, QUESTION AND QUESTION; after all it is your project and you are paying for it.
Well, it's a problem of getting involved, a problem of assuming responsibility, a problem of service, not of adorning your resume.
But lamenting, crying corrupton, etc. is futile unless responsibility is assumed.
AdC
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Try to stay as positive as possible, but dont let up. All you need is a few dedicated SH who see the problem, and will help you spread the word. Which, you have to do in (carefully) writing.
We had one Board member who told SH that the SH's who wanted him off the board had a personal agenda aganist him. And were telling lies. However, after someone finally sent a letter to all the SH exposing where they could find in the SH min, that this BM HAD forged proxies and other documents, we slowly chipped away his lies, and after three years, got him off the board. We are now discovering so many problems in the building due to his manangement, that it may take years to clean up the mess he left behind. BUT, he is already working on getting back on the Board.
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You are right. Man compaines have been given a free hand for too long and the AG wont help.
Email has made ALL the diffrence in our building. Our Man and a board member (who wants building permit favors) tried to quickly (Fri afternoon deadline) push the rest of the board into signing a $11,000 contract for AC brackets we did not need. (we were brought up to code the year before) In the past we would have realized this months later, and it would have been too late. COPY or BBC EVERYONE! The more people who know, the more the Man and Board will begin to pay attention.
Our little Emil group swinged into action. Started the Email paper trail, and stopped the contract.
No matter if its One or fifty Emails, once the trail is established, and you start building a record, and constantly reminding the Board and Man that you now have this trail,, you gain a lot of control QUESTION EVERYTHING.
OUr man com tried to stop Emails...But it was too late.
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J - You said you're in "a very poor coop, yet over $100,000 a year disappears topline". Regardless of whether your coop is rich or poor, if over $100K a year disappears and can't be accounted for, you have a major problem. Based on what you said is how this money is disappearing, a few comments:
- You said mgmt "writes checks to pay xx but those payments are not really made, and then the accountant overstates the expenses in the financials"? If you know this for a fact, why do you and your board put up with it? Fire mgmt and the accountant, and get honest people to handle your funds.
- Your mgmt company should give you a monthly report that includes a bank statement for the coop's checking account. It's not a big deal to look at that statement and see who checks are written to and for how much.
- Why are project contracts "double what they should be to begin with"? That's outrageous. Why do you even allow this? Doesn't your board look at bids and approve who a contract is awarded to? How can "unforeseen circumstances double it again"? Don't you use an engineering consultant to prepare project specs, get bids, advise you and oversee projects? If you don't you should. If you do and a lot of money is going down the drain needlessly (or into the wrong hands), it sounds like your engineering consultant should be tossed out along with mgmt and the accountant.
I know theft happens - but J, how can you say "the reason why is that the DA and the AG's office will do nothing so the mgmt company, certain board members, accountants, contractors and suppliers are very happy"? Corruption/theft is sometimes hard to uncover or prove. But if you know mgmt writes checks to people who shouldn't get them or project contracts are double the cost they should be to begin with, don't blame the DA or the AG's office. The blame goes to your board. A board shouldn't knowingly allow these things in the first place, and should definitely not let them continue year after year and do nothing about it.
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Are you on the board to do the e-mail trail or what software do you use to SPY on board members?
I would love to find out! Please share the secret of tough stewardship!
AdC
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I am not sure what you mean by spy on Board members.. We dont spy on anyone.
The Email trail is the one that we, the shareholders send to the board and mang agent... We send Emails from our various Internet providers... Nothing secret or devious going on here...Just a little checks and balances...
AliceT
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Without question there is a problem on the board that we have not been able to correct - as noted on previous postings shareholders are apathetic and will not come down and vote and those members of the board have the votes and we the few who try to tell what is going on are not listened to because those members tell people they interview that we are trouble makers, etc - Also the fact that at least 3/4 of our building really does not speak english well is another problem and most of the shareholders do not understand no matter how many times they are told that the only way to change things is to vote - they will not come to meetings - so naturally the problem continues because these people are on the board forever and it is their accountant and lawyer who tell the board that they cannot obtain documents, or what I say is not true even though I can present the documents - how many people to you really think understand financials -
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In other words, you leave the bad guys and the bad management in order to play the Carmen Sandiego game or Clue, etc.
If you put so much effort in e-mails, letters, etc., why don't you outvote the entire board and let the host of good guys and gals put their energies in running the co-op efficiently, rather than wasting their time looking in their electronic files for e-mails???
I think your co-op "little checks and balances" sound like a waste of time when the efforts may be placed in electing conscious shareholders.
Just a thought!
AdC
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First, I dont know what you are talking about "looking in eletronic files". We are not that computer savvy, sending emils is high-tech to us.
Without the emails and letters (we sent), and not letting them (the bad guys and mang) get away with anything, we created the "checks and blancnes" or the Email/paper trail, and by doing this we were successful this year in finally (took us three+ years) ridding the board of what you call the "Bad guys".
Although we still have the same Mang Company, they have suddely become our best friends, answer every Email and are actually following up on both complaints and request. So, as you can see, our whatever you want to call it (Carman Sandiego game, Clue) worked!!!
Thank you for your colorful comments. AliceT
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didn't have time to finish first reply - yes you are correct there should be records, however when board members request the bank statements, bills, etc they are not forthcoming - because they are told they do not have the right to them and the lawyer misquotes the law when questioned - you have to understand that these people are the majority and unfortunately one of them an officer runs everything and unfortunately the rest of the majority believe whatever is said by her,and vote with her - I did not say that these people are necessarily bright - in fact the stupider the better and they will not believe the others who can cite law and show the numbers but cannot get through to them -it is because you have board members, accountant, lawyer, etc all together and no matter they will get the vote - when I say I blame the DA & AG it is because they know full well what is going on, and the only way to retrieve the funds without massive lawsuits is thru them but they will not touch the matter - You may be very lucky to have a board that wants to serve the shareholders but in our coop most of the members do not even know the law that they are to serve the shareholders or that they are liable, they laugh when they are told that, and yes one member does ram contracts down the board because she has the vote and the consequences of same have been horrendous - and the result is we are raised and assessed every year with nothing done in our building and are building up enormous debt that we will be unable to pay -
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J - Forgive me, but I don't recall if you are a member of your board or not. There have been a lot of postings here. Are you on the board? Kindly reply. Thanks.
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This sounds too familiar,, but if you keep chiping away, you will succeed... The Email/Paper trail is your most powerful weapon.. The Board member who was our problem could knew exackly how to manipulate the small egos of certain board members... and anyone who disagreed with him or call him on his persoanl agenda, was labled as having a personal vendetta against him. His Victem act was worth a Tony award..
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Still interested in hearing feedback on how best to proceed now. All of this is still a little new to me.
If I'm going to try to suggest that the building bring in HBA (http://www.honestballot.com/) for the next election, it seems to me that I need to document the managing agent's mishandling of my proxy in this last election.
What is the smartest course of action?
A private email to the managing agent?
Or: an email or certified letter to the managing agent with copies to my designated proxy and, for example, the current board VP, who is honest if a little spineless? (One of the reasons he gave the other board members last term for not taking a firmer stand vis-a-vis the president is: he was afraid that the president might do something rash if confronted. That is indeed a very real fear. I don't think that the president would actually resort to physical violence if thwarted, but...well, I don't know. He might.)
Or: a certified letter to the managing agent with copies to every single shareholder in the building? As far as I know, shareholders have the right to a list of current shareholders with their contact information. This possibility might be too dramatic, however. I don't want drama. I want action and pragmatism, and an end to this abuse of power. I want things to be straightforward and above-board.
This afternoon I have an appointment to meet with my attorney, and I plan to run this by him. It just so happens that my attorney is no fan of the board president or of the management company. When I was purchasing my co-op, the attorney called the board president "an idiot" and said: "They've gotta get that management company out of there." His remarks seemed somewhat opaque at the time, but they're starting to make more sense.
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Send it to everyone on your list, certified, by email and copied again.
The more people who see this, the less likely they are to denie that they recied the request. Do you have Email addresses of fellow Shareholders. And put them in BCC.. with a notation on the request that Shareholders have also recieved this..
Our President and Mang Agent, ignored a request like this three years ago. But we only sent it to them. And, by doing this they broke the ByLaws of the building. Before the Next SH meeting, we sent the letter/emial to absolutely everyone even remotly involved. Copied the AG....
This will take time but if you keep this up, stay steady, and you too will win...
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Thanks so much for your response, Alice.
My plan is to request a list of shareholders and contact information from the managing agent (with a cc to the board VP). The request will doubtless meet with resistance from the MA and the BP, but they really kind of have to comply. I'm sure the MA will try to run out the clock (as she has done previously on other issues), but that's okay: I'll just keep asking politely.
Then, my attorney will send a certified letter to her and to the board VP, with copies to all shareholders, documenting the recent mishandling of my proxy and, in light of that mishandling, requesting that the building bring in HBA to monitor next year's election.
We may have some leverage here. In an article (http://cooperator.com/articles/1189/1/Business-Corporation-Law/Page1.html) in The Cooperator, I read the following:
"Inspectors of Election: Before the 1998 BCL overhaul, boards were permitted to ignore any bylaw provision requiring appointment of inspectors of election—so long as no shareholder demanded such an appointment. Currently, if such a provision exists in the building’s bylaws or Certificate of Incorporation (which is usually the case), compliance is mandatory."
And in fact our bylaws state:
"At any election of directors where more candidates are nominated than there are positions to be filled, the election shall be conducted by two inspectors of election to be appointed by the president. . . . Before entering upon the discharge of their duties, the inspectors appointed to act at any meeting of the shareholders shall be sworn faithfully to execute the duties of inspectors at such meeting with strict impartiality . . . "
It seems to me that the MA (and indeed the entire board) should have been aware of this stipulation in the bylaws. If they were aware of it, they may have been taking for granted that the shareholders would not be. At any rate, if compliance is mandatory and if this was not adhered to at the meeting, it suggests that, technically, the election was not handled properly.
Our bylaws go on to outline the proper "Order of Business," of which the third item is this: "Roll call and presentation and examination of proxies."
Does anyone know what, exactly, is meant by "presentation and examination of proxies?" This is another point where the last meeting diverged from the bylaws.
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"Presentation and examination of proxies" means all proxies for any meeting of shareholders should be presented to the inspectors of election or whoever tabulates the shares so the proxies can be:
1) examined to make sure they're valid submissions (e.g., properly signed and dated)
2) counted to tally the total shares represented in person and by proxy for that meeting
This is done at the beginning of the meeting to make sure there's a quorum so the meeting can properly continue. It also gives the tabulators time to double-check the shares by proxy so they can be included in any vote (including election of the board) that takes place during the meeting.
Proxies are usually mailed or given to mgmt but mgmt people may not be the tabulators of shares at the meeting. Proxies are also given directly to designated proxy agents and that isn't usually known until they arrive at the meeting.
It's my understanding that only proxies with original ink signatures are valid (not e-mails, faxes or photocopies). Also, proxies naming a property mgr or other mgmt person as proxy agent can only be counted to establish a quorum. They can't be counted in any voting. And also, proxies can't be counted in any voting if the proxy agent doesn't attend the meeting - unless the proxy, for ex, lists board candidates or issues to be voted on and allows Shs to indicate how they want their shares voted.
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In my previous post, I said "proxies are usually mailed or given to mgmt but mgmt people may not be the tabulators of shares at the meeting." When I re-read that, I realized it needed clarification. I didn't mean that mgmt people CAN'T be the tabulators. I meant they may not necessarily be the ones to whom that task has been designated.
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Thanks for the clarification, BP.
"Also, proxies naming a property mgr or other mgmt person as proxy agent can only be counted to establish a quorum."
So if the sponsor names the managing agent as his proxy, she can't vote? Or shouldn't vote?
If the sponsor names the board president as his proxy, I assume that the president can then vote (for himself), correct?
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GK - Our mgmt co and coop attorney told us if the sponsor (or any Shs) name the managing agent as their proxy, he/she CANNOT vote on any issue or for a board. A managing agent works for the full board, no matter whom it consists of. It can also reflect "share manipulation" if, say, a managing agent is in cahoots with a disreputable board pres or if he doesn't like one or two board members and wants them out for his own reasons.
If the sponsor (or any Shs) name the board pres as his proxy, the pres can of course vote for himself. If the pres hopes to be re-elected, I'd be very surprised if he didn't use any proxies he has to better his own chances.
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"If the pres hopes to be re-elected. . . "
"Hopes" is an understatement. There's a certain desperation about it that would be comical if I weren't so concerned about the building. If someone will only serve on a board if he can be its president, if someone has to resort to all sorts of strategery to get re-elected...dang!
Perhaps this is straying a bit, but as I mentioned in another post, the VP hesitated to take action because he feared rash behavior or fallout from this guy. This is a textbook bully we're talking about here. I wonder how many other concerned shareholders/fellow board members have suffered in silence because they feared retaliation?
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GK: If your board VP won't take action to help to get rid of your pres, I can't say I think much of your VP either - especially if the pres is not only a bully but also guilty of much wrongdoing. Using intimidation to get elected or to control things is not uncommon but people only succeed in bullying if no one stands up to them. What about your other board members? If they care about your coop, they should work together, tell Shs what's going on (and document it), and get the pres voted out. There's strength in numbers.
The pres might seem like a force that can't be overcome but he's only one person. Rally the troops, diffuse his power, and get out of this defeatist situation.
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In the perfect world, this is the way it should be. But our Pres had a majority of the Board on his side (the super worked for them) You need to rally the SH to elect at least one of you to be on the Board, two would be best, and then you can start to fight from the inside. Everyone who comes to this site, by now knows that a controling board member is very hard to get rid of. He/she has figured out how to pull the strings.
Remember that most people just want to come home to peace and quiet... But if you do the grunt work, they will follow. AND once they see that a majority of SH are backing you, they too will join your team.
Bullies hate to be confronted, and in reality they want to be win the popularity contest.. So if you continue to expose them -- you will gain with the SH and eventually get them out... (Poetic justice: One of the BM who had extensive (illegal) renovations by this Super, lost at least one deal, and had to put off his closing because of the illegal work.)
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AliceT wrote:
"Everyone who comes to this site, by now knows that a controling board member is very hard to get rid of. He/she has figured out how to pull the strings."
Word.
BP wrote:
"Rally the troops, diffuse his power, and get out of this defeatist situation."
BP, I appreciate your optimistic encouragement. "Defeatist" indeed describes this situation well.
Sometimes I feel as if I'm one of the few people willing to stick my neck out, and that can feel isolating. No one wants to do something that will ruin one's life or at least make it more difficult than it needs to be.
One thing to keep in mind... I know that we're not supposed to engage in "analysis" on this board, but I sort of can't help it and I do think that it's relevant here: I strongly believe that this is a question of Antisocial Personality Disorder (APD) with a strong narcissistic component. This is a combination often seen in criminal populations but also, very very occasionally, in high-functioning people. You really have to tread carefully with such folks, as they are playing by a completely different set of rules than most of us. And they can do very real damage.
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I agree. It's tough when a key person plays by a completely different set of rules. It's like one team member insisting on playing basketball when the rest of the team is playing baseball (maybe a poor analogy but you get my point). Don't worry if your pres is one of those high-functioning people who can be known to act "bizarre." Focus on how your board and coop function. If you really suspect he could do damage or harm anyone, tell the Shs (but carefully without scaring them). Maybe voice concerns to your local police precinct and ask them to note your visit in their files. If anything did happen in the future, you'd have a piece of your paper trail with them.
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"I agree. It's tough when a key person plays by a completely different set of rules. It's like one team member insisting on playing basketball when the rest of the team is playing baseball (maybe a poor analogy but you get my point)."
Or, to use another analogy: it's kind of like Dick Cheney.
Thanks for the idea about making a note with the local precinct. Can't hurt, I guess. They'll probably think I'm nuts, but it can't hurt.
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GK: Alerting police to situations before they happen or go too far can help. We had odd characters of all ages at all hours in/out of 2 apts owned by brothers. We suspected but couldn't prove drug dealing (hard drugs). Some characters were so whacked out, they could barely walk. We told local police and they began patroling our block and making their presence obvious. Within a month, no more characters. Both brothers sold their apts in the next year.
A few years ago we had an owner who said residents were out to get her. She'd pin them in the elevator and say, "I'll get you before you get me". We told the police about her. She trapped an owner's teenage daughter in the laundry one day and was slapping her. Another owner called the police. They came just as she was about to hit the girl with a wrench that was by the sink. She was arrested for assault and it took 2 years but we got her evicted. Our bldg isn't Trump Tower but it's a nice bldg. You never know. So a few words to the police can't hurt.
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GK, You will be stunned by how many of the BM dont have the faintest idea of the law or ByLaws.
As to the SH list, go to the AG site and you will see that they are required to give you this list. It took us four months to finally make our Man company comply. And, once more Email power ruled. After they saw the Emails piling up, and other SH making the same request, they had no choice. You are in business with all the other shareholders, and you have a right to know who they are.
Our mang company frist tried to get past us with a very old list, but we quickly called them on this.
Keeping this list is one of the most basic jobs of the ManCo, and when you write them, cut and paste the paragraph from the AG site...
CC EVERYBODY.. Remember, they dont want other SH to see what is going on....Read the Bylaws... ask questions.. and at the same time, stay professional and businesslike.
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Thanks again, Alice.
"cut and paste the paragraph from the AG site..."
The URL for the Attorney General is: http://www.oag.state.ny.us/realestate/coop_prob.html
And for the BCL: http://law.onecle.com/new-york/business-corporations/index.html
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Does it do any good to go to attorney general about an out of control board?
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A group of candidates running for board brought a lawyer to the annual meeting to contest the right of the Sponsor to vote for board seats as he has done since conversion. These candidates with the help of sitting board members blocked the co-op's attorney from attending the meeting. The result was chaos and the meeting was postponed. The candidates with their own lawyer publicly claimed the co-op's attorney served the interest of the Sponsor though no evidence was presented to support this. In the chaotic, unprofessional, ego-driven world that is often NYC co-ops, anyone have experience in this kind of situation and advice on how to stop the warring factions?
FUN!!
yes, I have seen some crazy meetings such as this... (on both sides) We have taken sponsors out, and changed entire boards, done it all!
Does the current Board need to be replaced as violently as this? There seems to be a lot of variables not in the picture here; but we are not here to play therapist and analyze the players, here is the bottom line:
Where was the managing agent during this?... and what was he/she doing?
They run the meeting, not the candidates.
When the meeting is to be re-held, inform the managing agent exactly how the meeting is to be run, with no variation.
They will/should know to bring an assistant to oversee the count, and at least one more associate, just to have a greater presence.
Know the protocol and stay the course.
~AR
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What are the requirements to terminate a shareholders lease for what amounts to be safety and secutiy issues as well as objectionable conduct.
Our coop has a shareholder who is a safety risk to herself and others living in the building.
This shareholder does not appear to be gainfully employed but her parents pay the maintenance.
She brings in drug dealers and various friends to the building that have created a number of incidents, many of which required police department involvement.
Our board is concerned and needs to do something.
Both of them go hand-in-hand together. Speak with your co-op counsel, who should have written a series of letters to your resident. If not,then gather all the management correspondence and police reports, speak with your consel and let him/her guide you to a successful termination.
Finally, whether the person is gainfully employed or not, is not an issue since there is no such thing as persons only to be gainfully employed may live in a co-op. Otherwise, you would not have retired people who might have been gainfully employed in the past or someone who is just trading stocks in your co-op.
AdC
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are they really, honestly drug dealers or do you just not like the looks of the friends and others?
what sort of inceidents that have required police?
you need to present more facts otherwise this seems like a personal bias and the tenant / ans shareholding parents could sue you for slander or character defemation or any associated acts of bad faith.
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I have no personal agenda and have been the lone holdout on this board until recently. I can no longer look the other way as this is a serious safety issue (fires, fights, urinating in stairwells, noise, damaged common areas).
We have confirmation of the drug dealing and the poilce incidents are well documented.
I do agree with Adc that not being gainfully employed has nothing to do with it.
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in that case, document everything with dates and times and police reports. you could also tryi imposing fines for trashing any public spaces.
also, try calling the parents.
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You can also contact your community affairs officer through your local precinct.
He will work with you, if you have the documentation on the drugs that you say, to bring a holdover and evict them on the grounds that the illegal activity in itself is a breach of lease, the rest is gravy.
Have other residents back you by signing letters.
~AR
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we are a 52 unit coop Forest Hills, Queens. We have unmanageable managing agent. We are looking for information on two issues:
1. What can we do to control Managing Agent? He absolutely ignores the Board requests.
2. Can somebody recommend a good Managing agent?
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You should never have to "control' your managing agent. Either they manage the building, or they don't.
Have you taken this up with his/her superiors at the management company? If not, that is your first step, if not, then its time to shop.
There is another recent post on here with regard to hiring a new managing agent you can refer to for more information on that. You can email me directly for assistance if you like.
~AR
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Try contacting Matthew Adam Poperties, Inc.
(212) 699-8900 Ira M. Meister
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Try contacting Matthew Adam Properties, Inc.
(212) 699-8900 Ira M. Meister
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There is a (relative recent) case on the books, that was written up in the NYTimes about a board kicking out a coop owner, perhaps you can check the Times archives.
Documentation is vital. Even the smallest incident. And going over and meeting with your local police will add to your case. But you have to take the uncomfortable step, and sign a complaint or write letters.
We have a problem in our building, but the neighbor/owners just wanted the board to do something, but until they started writing their complaints, it was hear-say, and the boards hands were tied.
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What happens to the unit of the shareholder whose lease has been terminated for objectionable conduct? Does the apt become property of Co-op or revert to the bank? Is there a time frame in which the kicked-out shareholder gets to try to sell the unit?
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As others have suggested, first contact your co-op lawyer.
He/she will help you figure out how to terminate the lease of this person.
It can be done. Most (but not all) proprietary leases say something similar to this: A proprietary lease can be terminated by a vote of two-thirds of shares, or their proxies, at a special meeting duly called for the purpose of terminating the lease of the shareholder in question.
I don't envy you, but your problem shareholder sounds like the kind of person who's workth the effort to get rid of.
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The penthouse shareholders want the Coop to abate part of their maintenance because their terraces are being used as a staging area for the Local Law 11 repairs. Our Coop's lawyer says that our Proprietary Lease and case law does not obligate the Coop to refund part of their maintenance. Do you think it would be the nice thing to do?
Reply to Terrace OP. Sorry for using the Anonymous label. My apologies!
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AdC and AR, thank you. It's good to get different opinions.
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I believe the question should not be "......a nice thing to do?.." The Board is not in place to be nice, but to fulfill the fiduciary responsibilities that they were voted in for; in other words, ask rather:
Would reimbursing them, either whole or in part for the square footage used, benefit the coop as a whole?
What happens next time if you don’t reimburse them this time?
Is the penthouse terrace allocated shares? is so, then it is part of their apartment unit and my personal belief would be to pay them an agreed amount based on the space/share allocation. If it were your living room they occupied, you would feel the same, no?
I also believe that at the end of the day, the coop will be benefited by this decision, in that it would cost you more in construction fees if they had to stage elsewhere, a shareholder is more apt to permit access next time it's needed, the staging permits the work to move along faster...
Also, ensure the contractors (at their expense) leave the site better off than it was to begin with..
~AR
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I would go for the lawyer's advice if the PL is silent and the co-op is responsible for repairing the penthouse terraces. While the terraces may be for the exclusive use of the residents in the penthouses, in your case the board is taking care of the common good, i.e., the facade and potential liability of the entire building. As AR states, the board is exercising its fiduciary responsibility to meet the requirements of the law and making the builing safe. If the terraces were to be repaired, the co-op would not abate the residents for repairing them. So, let them bite the bullet and take care the good of the entire building too!
AdC
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I am looking into this rebate from the state for using bio-fuel in a large building. anyone have any tips or contcts? thanks
I saw it inthe Super intendent's Club Newsletter - about using a 20/80 biofuel mix with no. 2 or no. 6 oil . It is supposed to be alot cleaner plus the state pays you a bit back per gallon.
Which issue of the Super's Club Newsletter did you read this? Very interesting! Thank you.
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June issue - i think it starts on page 2 or 3. available online.
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contact Dick Koral at 718 552 1161. He is the Secectary of the Superintendents Tecnincal Assoc., AKA Supers club. He is also on the committee for the Bio dissel program.
Pgrech
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you can read the artical by going to www.nysta.org look for the newsletter page.
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may be that this rebate is only valid until June 30th if not extended. also is it diesel or no. 6 no. 2 mix?
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I dont know too much more, However, We are arranging an INFO Seminar about Bio-Dissel fuel with the Council of NY Cooperatives and condos, and two other Owner groups. When I have more info I will let you know as we do not have a date yet, we believe it will most likely happen in September. The announcement will be printed in the newsletter and posted on the STA web site. I am proud to say Supers club has beween working with NYSERD and Cornell University for over two years on this program.
Pgrech
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Does the burner need a oil/diesel conversion, or is this a mix for any #2,4,6 oil?
I would apreciate any additional info you have on this... thx
~AR
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The biodiesel / home heating oil and who markets it, legislation and a ton of information is available is anyone uses the following link:
http://www.biodiesel.org/
For clarification, biodiesel for home heating is not NO. 2 and No. 6 blend. Such a mixture is Heating Oil No. 4 and there is no rebate for No. 4.
AdC
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ASc_ please check your facts. obviously you are not talking about the same thing. we spoke to Metro who sells the heating oil B20 for no. 2 and no. 6.
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I read your message briefly and did not catch that the bio fuel is to be mixed with either no. 2 or no. 6. My take was a mixture of hydrocarbon based oil mixture of no. 2 and no. 6 which makes no. 4.
Nonetheless, the site I offered (which is the biofuel association) offers a wealth of info on biofuel and a directory of companies throughout the tri-state area that offers the product in question.
AdC
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I am a member of a newly elected coop board. Our previous board had no established policy on sublets. I have been tasked with finding out what a sensible policy on sublets is. We have several shareholders who have been subletting their apartments for years and resident shareholders are now complaining to have this changed. Any advice?
Subletting and renting rules must be in your bylaws if you wish to enforce any prohibition.
Our co-op has a rule that there are absolutely no sublets.
You might be able to enforce something retroactively if your proprietary lease document stipulates that only those on a “proprietary lease / stock certificate” may live in the unit.
= = = = = = = = = =
We are now in the throes of converting our 500 unit coop to condo. (As I have previously noted in other postings, we do not have any underlying mortgage so our path is significantly less onerous than the path faced by others coops. Likewise, we have not shirked our responsibility to fund capital improvements.)
We have learned in NJ as a condo association, we must allow rentals, but we can impose restrictions. By the way, this requirement to allow rentals is not a legal requirement in Florida. States differ.
Our planned restrictions will include:
1. One must be an owner for two years before one can rent. This avoids buying for investment purposes to rent only.
2. There will be a minimum of two years on a rental. This avoids transient populations.
3. The condo owner must pay a fee to the condo association up front. This avoids, “oops”, they skipped and we want to rent again.
4. There will be a limit of 20% as to the number of units that can be on rental at any one time. This avoids becoming a predominantly rental property. Conversely, this still maintains an 80% owner / resident population. Of note is that until five years ago, the sponsor owned about 20% of the units and thus we did have a rental population with no adverse affects, as the sponsor screened all rentals. The sponsor slowly divested its units over the past five years.
= = = = = = = = = =
Separately, I have researched the question of rentals, and I have found that there are additional impositions that can be enforced:
1. There can be a limit as to the dollar amount for which a unit can be rented.
2. A surcharge can be imposed, if an owner wishes to exceed the 20% limit.
At this time, we are reviewing changes to our coop bylaws that will be carried into the condo association bylaws. So, all the above is under consideration.
= = = = = = = = = =
Are there any other thoughts for the originator of the question or to our conversion plans narrated above?
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Who are the firms that can convert a co-op property?
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.
In turn we are employing the services of a firm that has a long history of coop and condo sponsorship.
Note we are unique as our coop does not have any underlying mortgage and we have not shirked our responsibilities in funding capital improvements.
The firm we are employing is:
Arilex Realty Corp
1000 Portside Dr
Edgewater, NJ 07020
(201) 943-6030
If you elect to call Arilex, ask for Jimmy D. and indicate to the staff that Ted made the referral. I spoke to Jimmy this evening and indicated that I would be posting his firm’s name.
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We are very interested in talking to you regarding your conversion to condo. Could you give me a call?
212-505-2030 ext. 3007.
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XXXXXX CORP.
XXXXXXXXX AVE, NEW YORK XXXX
POLICY FOR SUBLEASING
1. Definitions. The following terms shall have the meanings respectively ascribed to them:
(a) Applicant refers to a person who proposes to sublease an apartment in the building owned by the Corporation from a Shareholder.
(b) Board means the board of directors of the Corporation.
(c) Corporation means XXXXXX Avenue Corp.
(d) Effective Date means June 26, 2003.
(e) Proprietary Lease refers to the proprietary lease between the Corporation and the Shareholders.
(f) Shareholder refers to a Shareholder of the Corporation.
2. Coverage of this Policy and Requirement for Board Approval. No sublease shall take effect or be valid without compliance with the sublet policy set forth herein, nor shall any sublease be valid until approved in writing by the Board as provided in the Proprietary Lease. This sublet policy shall become effective on the Effective Date with respect to subleases entered into on or after the Effective Date. This sublet policy shall not apply to any sublease duly approved by the Board which commenced prior to the Effective Date, but it shall be effective with respect to: (i) any extended or renewal term thereof commencing on or after the Effective Date; and (ii) any sublease which commenced prior to the Effective Date and which was not been duly approved by the Board prior to the Effective Date. The term “Subletting” shall include the occupancy of an apartment by any person not authorized to occupy the apartment by the provisions of the Proprietary Lease, whether or not any rent is paid by such occupant.
3. General Criteria For Subletting. The following provisions shall apply to all apartments other than those owned by holders of unsold shares:
(a) No more than thirteen percent (13%) of apartments owned by Shareholders, excluding apartment(s) owned by a holder of unsold shares, may be sublet at any given time (“sublet quota”).
(b) No Shareholder shall be permitted to sublet the whole or any part of his/her apartment until he/she shall have owned his/her shares in the Corporation for a period of not less than two (2) years prior to the commencement date of the sublease term. This requirement may be waived by the Board, provided such waiver is in writing.
(c) Except for apartment(s) owned by a holder of unsold shares, no apartment may be sublet for a period or periods exceeding two (2) years out of any five (5) year period. This limitation may be waived by the Board, provided such waiver is in writing.
(d) No Shareholder may sublet more than one apartment during any given one year period.
(e) Upon receipt of a completed sublease application, the Shareholder's request will be placed on a list and reviewed by the Board. Generally, Board consideration of sublet applications will be on a first-come-first-serve basis, subject to the sublet quota. If more than one Shareholder seeks approval to sublet his or her apartment, the Board may, in its discretion, give preference to a Shareholder who has historically sublet his/her apartment less frequently than others, but nothing in this Sublet Policy is intended to diminish or restrict the Board’s discretion with regard to the granting or withholding of consent, for any reason or no reason, or to impose such conditions as the Board deems appropriate in connection with the granting of any consent.
(f) No sublease application shall be considered by the Board in the event that the Shareholder is then in default of his/her Proprietary Lease, including without limitation breach of the house rules, failure to pay any maintenance fees, assessments, garage parking fees, repair fees, or any other outstanding fee or charge due.
(g) The term of each sublease shall not exceed one (1) year, unless extended with written approval by the Board. In addition, each sublease agreement must begin on the first day of a calendar month.
(h) Any proposed sublease must specifically state that it is subject to all of the terms and conditions of the Proprietary Lease and that it is subordinate to the Proprietary Lease. A breach of the house rules by a subtenant shall also be deemed a breach of the Shareholder’s Proprietary Lease.
(i) Each Shareholder subletting an apartment shall maintain a comprehensive homeowners type policy with an A rated insurance company, including (i) coverage of at least 80% of replacement value of the interior portions of the premises for which the Shareholder is responsible to maintain and repair under his/her Proprietary Lease, including the Shareholder’s improvements, fixtures, wall coverings, floor coverings, the finished surfaces of all floors, and all other of Shareholder’s improvements and installations, (ii) personal property contents insurance to cover contents contained within the apartment, (iii) other provisions that the Board may require, and (iv) liability insurance in an initial amount of not less than $100,000 (the "minimum amount"), provided that in their sole discretion, the Directors may, by resolution, increase the minimum amount of such liability insurance from time to time.
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4. Application Procedures.
(a) Four (4) sets of a duly completed application to sublease must be delivered to the Board in care of the Corporation’s managing agent at least thirty (30) days prior to the first day of the month that the sublease term (or renewal or extended term, as the case may be) is to take effect.
(b) An application to sublease an apartment, or to extend or renew an existing sublease must contain the following:
i. A properly completed and signed application form;
ii. Permission to check the Applicant’s credit history;
iii. Copies of the Applicant’s State and Federal Income Tax Returns, and W2 forms for the two most recent years;
iv. Verification of the Applicant’s current employment stating position, length of employment, and salary;
v. Verification of Applicant’s current residence, including a copy of two months’ insurance bills, utility bills or credit card bills;
vi. Copy of three months’ most recent banking and brokerage accounts, together with a letter from each institution indicating types of accounts and the date(s) the accounts were opened;
vii. One business reference letters;
viii. Two personal reference letters;
ix. One letter of reference from Applicant’s current or most recent landlord (or its managing agent) stating length of residence and payment history together with rent receipts, cancelled checks/money orders on account of rent for the most recent twelve (12) month period;
x. The written consent of the Shareholder’s lending institution (if any) to the proposed sublease; and
xi. The fully executed counterpart original standard sublease agreement.
(c) Falsification or omission of information may result in the denial of the sublease application by the Board, and may also result in termination of the current sublease.
(d) All persons who will reside in the apartment with the Applicant must attend a Board interview. No person, other than those named in the Applicant’s application and the sublease, may occupy the sublet premises without prior written approval from the Board. Any such requests must be submitted to the Board in writing, along with a completed application form.
5. Fees.
(a) Each Shareholder to whom consent to sublease is granted must pay a sublet fee to the Corporation on the first day of each and every month of the sublease term, as follows:
i. 10% of the monthly maintenance for the first year or partial year of the sublease term, except as provided in (b) below; and
ii. 15% of the monthly maintenance for each additional year or partial year of any extended sublease term. For these purposes an “extended sublease term” shall include a sublease to a new sublessee if less than one year shall have elapsed since the expiration or termination of any prior sublease.
(b) The following fees must be paid to the Corporation at the time a sublease application is submitted:
i. A non-refundable $75 credit check fee;
ii. A refundable $500 moving deposit to cover possible damage to the building caused by the moving in or out of the subject apartment;
iii. A non-refundable $100 processing fee; and
iv. A non-refundable $250 interview fee.
(c) The following fees must be paid to the Corporation at the time an application to renew or extend an existing sublease application is submitted:
i. A non-refundable $100 processing fee; and
ii. A non-refundable $150 interview fee.
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We for the most part do not allow sub-let.
It is nothing but trouble. In fact if you have to many your insurance rate will go up.
Best bet for the bldg. unless absolutly necessary don't allow it.
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Thanks for your informative response,,, One more question... Is there a restriction on how many times an apartment can be sublet?
A number of years ago the Board relaxed the rules, and some of the absentee owners run B&B in our building. We now have board members who are intrested in changing the house rules.
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Habitatmag.com article archives has a treasure trove of info. Search the phrase Sublet Policies and sort by "Relevance". Good luck.
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Is it normal to be able to smell paint and other chemicals through the party walls between two buildings? Last January, the brownstone to our east had a sewer line pipe break in the basement and it flooded their basement and first floor. The smell was terrible and migrated into the halls of our building and into some of our shareholder's apts all the way up to the sixth floor. For the past six months we have endured a barrage of smells from mold killing chemicals are worried about the fact that this is even happening. How can we ensure no damage has been done to our wall in the course of their repairing their problem and what course of action should we take? We can't even find the address of the owner listed on the NYC DOB site. Thanks.
Apparently you need an engineering company if you're looking for structural damages due to water penetration or other issues.
AdC
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There are lots of other ways to obtain the owners information. AdC is right in that you should have a professional look at the possible damage and access it.
Feel free to email me (ar0777@aol.com) your info and I will help you obtain the info you want. make surte you put habitat in the subject.
~AR
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Is there a firm in West. Cty someone can recommend for property management other than garthchester, barhite, maxx or hudson north that is worth their fee
We use Stillman Management in Mamaroneck and are very happy.
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What are their fees per unit and what do they give you v. expectations for the fee to know what to recommend? After all, 99% of their contracts are just boilerplate. I don't mean to sound insulting, but I found out that I cannot expect top shelf when I only pay for less than french fries. The other day, it was quoted $2.00 a day per unit. In doing my math, I thought I was only paying 1/3 of that, but as I mention to the board if the $2.00 a day gets what I put in, it's worth it all the way!
AdC
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Duly Noted. In trying to gauge cost vs. quality, one would need to know who to call and then determine if they are worth their salt (to put on those fries) I am tired of having to choose from the same old companies time and time again.
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Perhaps it's a matter of talking to the president or owner of the company and request to have a managing agent PT dedicated to your building and find out how much they charge for the service. Unless the person is there in your building to take care of requests and supervise workers, etc., the type of service you may get may be shared.
I think we are kicking in Westchester the same, old bucket but in many instances it boils down to costs and what you will be willing to pay for the service. IN fact, you mentioned Bartheit. Many people think they are wonderful.
Others think that Stillman is okay and others above the cut. So what makes the discrepancy of opinion???
I think what we think we want to eath and what we get for dinner must influence how well we perceive the eating experience.
AdC
AdC
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Excellent points AdC.
Unfortunately I do not know anyone in that area and we are not fully launched yet. However please note:
Ensure your expectations are crystal clear before you even shop. Know what you expect from the management company, then lay it out... "I want X Y Z... from you, can you provide this in the manner we need?" if so, have it put into the contract. you do not have to accept the boiler plate contract you are given. You may now pay a little more, but you are contracted to recieve what you want and need. Do interview the agent (there are other posts on that), because (in keeping with AdC's analagy), we can go even to the best resteraunt in town, pay top dollar, but if the service stinks, we dont go back. AGAIN.. make your expectations clear.
~AR
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Sequoia Property in Mount Kisco
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WRG Management
420 Westchester Avenue
Port Chester, NY 10573
Tel: 914.939.9100
Contact Carol Benedict at cbenedict@wrg.com or visit their Web site at http://www.wrg.com
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Didn't WRG merge with Stillman a few years ago?
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WRG sold to Stillman approximately 6-1 year ago and they are no longer in Port Chester.
AdC
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I use to reside in a complex in Tarrytown until 2005, it was self managed when I left to move closer to family in California. They had several managers come and go over the past 30 years and finally they decided to hire the assistant manager as the property manager who worked with them for over 12 years. I tell you the place never looked better! Sales increased because the property was finally being managed the right way! As a homeowner who was the biggest complainer, I found myself making less calls and finally taking a deep breath that the property I am living in is finally being taken cared of. Well, the Board changed over the years and they hired a new homeowners association president who wanted to make changes she felt would matter. With a lot of hard work the President finally forced the manager out of a job doing all she can to get the board to rule in her favor. I now hear this board member served on other boards in Westchester and did the same thing and was finally forced to step down after other members saw what was going on. You can hire a contractor and check references, but when someone goes on the Board to monitor our investment, do they check out their background as well? I still keep in touch with some of my friends who informed me that the property is now being managed by a company and is going down hill. They have one placed their homes on the market. Some residents are getting together with the board to ask for this individual to step down. It goes to show you that the better your property is managed, the better it looks the better it sells. It only takes that one board member who looks out for their own interest not the residents. I do have to give it to the ones who take their jobs seriously they are the true volunteers who take their position on the board serious and it takes a lot of work and time. I applaud those members!
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EVERYONE -
1) make sure to have your water bill carefully checked! We just got back, yes, $25,000. (the guy hired to review the bills got to keep 10% as payment)
2) also we had a plumber fix every single leak inthe building and review all plumbing in each apt and our bill went down dramatically!
3) if you have a commercial tenant, they should pay their own water bill. OUrs was using our water and we worked out a payment deal for past costs when we found out.
Sally is right. Let me add one more suggestion:
4) If the water bill is currently "estimating" your building's water usage, buy a water meter. We did this and saved about 30% on our water bill. (The city was estimating greater water consumption than was accurate.)
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Sally, is the person you hired to review your water bills available for hire? If so, could you provide his info? Just curious, how many units is your building?
Thanks.
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Any ideas on how to address a chronic objectionable behavior issue with someone who got himself elected to the new Board due to the large amount of shares assigned to his unit? The outgoing Board was ready to send an attoney's letter to the person about smoke and noise coming from his apt and decided to wait until the new elections. Now we have the problem shareholder on the Board. We have a majority within the Board who want to resolve this problem, however. The Shareholder has refused for years, to take adequate measures to soundproof and stop migrating smoke which fills the lobby and penetrates other apts. We have never tried legal avenues before. Should we speak to the Board member first or send a letter? Can he even be on the Board if he is in violation of the house rules? Help! Thanks, BT
That's going to be a tricky situation, BT.
I suggest speaking with your corporate counsel first. You need to know where you stand before asking the guy to do something.
Find out what he can be asked to do, in what time frame, etc., under your propreitary lease and the law. (There's plenty of case law on smokers -- do you read The Times's Real Estate section?)
Then ask the person nicely, not at a board meeting. Presumably that won't work, so it should next be brought up at a board meeting so the smoker can see that it's all of you vs. him (have with you copies of letters complaining about him) . If that doesn't work, you'll have to have a letter sent. Remember, the lawyer works for the board president (so I hope the smoker isn't the pres!), not individual members of the board, so the smoker can't have the lawyer fire back.
Is this person an officer too (secretary, treasurer or vice president)? Our by-laws allow the board to strip an officer of his/her office by majority vote. NOTE: This is NOT stripping him/her of membership on the board; that probably requires a votes of the shareholders. But it's something you can do to send a message that his behavior is not proper.
I'm curious to see what other suggest ... they are probably better ideas out there.
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Please explain "lawyer works for the board president". Does not the lawyer work for the entire board of directors?
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That's a good question. Let me preface this by pointing out that I am not a lawyer, just a board member who works with one. So before you make any decision, consult your lawyer first.
Here's what I mean. Our board recently needed to hire a new corporate counsel (our previous one raised his rates too high for us). We interviewed several lawyers. One of the questions we asked was, "What is one of the biggest mistakes boards make?" One of the replies was "infighting."
The lawyer went on to say that in a case where the board doesn't agree on an issue that involves the lawyer, the lawyer has to follow the president's instructions.
So even if the board wants to do X, and the president tells the lawyer to do Y, the lawyer has to do the latter. (Doing so, of course, sets up the board president for a coup.)
Again, I'm not a lawyer, so don't take this as case law. In the example of the original question, I was pointing out that if the smoker is the board president, the board as a whole may be limited in its legal options -- because the board president could block them. Which would be an abrogation of his/her fiduciary duty, but if the person is addicted to nicotine, he/she may not see things clearly.
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Thanks for all the feedback. We have 2 co-presidents (it is a really small building with lots of problems so they are splitting it). The problem person is secretary. We are not really talking about cigarette smoke, though there are small smaller issues with that within the building. It is pot smoke. Just to re-cap, management sent a letter last year whereupon the behavior got better but it always reverts. A shareholder spoke to him directly about the smoke and was sent a note apologizing saying a new air filter was bought. While that has lessened the odor for now, it will come back. The bass noise is always audible in the lobby and halls and travels through the floors and walls into the shareholders units above. He is only on the Board to protect himself, and probably assumes we will be in this confused position about how to deal with it.
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If the offending shareholder is a heavy pot smoker, why wasn't the illegality of this used as leverage to get him to be more compliant? Couldn't this be used now?
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I generally agree with AdC and Steve with an exception - that if the board wants to do X and the president wants to do Y, the coop's lawyer has to do what the president wants.
The lawyer doesn't work for the board, the president, any one board member, any shareholders or management. He works for the coop - the apartment corporation. He is not duty bound to do what the president wants. His job is to work in the best interests of the coop as a whole. If he believes that what the president wants doesn't accomplish that, he isn't duty bound to comply, and he can't just do what he wants either.
Much of a lawyer's job is advisory. If a board disagrees on what to do in a particular case, he should advise them as to what's legal, proper and best for the coop. He shouldn't just do what anyone wants. If a board (including president) can't agree on something that will be in the coop's best interests, he shouldn't do anything until they can agree on this. Some lawyers may not follow this precept but this is what they should do.
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For your info, as a board president, if I have a disagreement with the board, i.e., I think one way and the majority another, I ask the attorney to speak with the board (all members) and go over the situation. Everyone gets the education and the benefit of the doubt.
But it's not me and my lawyer. As you well stated, it is the co-op legal counsel. The day I want to pay for my personal advice, I will count my pennies and open my pocket.
AdC
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Glad you agree, AdC. A coop attorney works for the coop. We had a Sh who wanted to sue two board members. He claimed they OK'd a new coop fee that he couldn't afford to pay and they knew he had financial problems because he told them so in private as "friends". Our attorney said he couldn't address issues for individual board members and they'd have to get their own attorneys to handle it. (The Sh eventually dropped the whole thing.)
A friend who's on a board in another coop had problems with three Shs who openly told lies about him to get themselves elected. He wanted to sue and asked his coop's attorney for help, but the attorney said no because he only works for the coop. (He got his own attorney and sued the three Shs for liable. A few Shs appeared in court for him to attest that they were told the lies, that were easily disproved, and the three Shs had to pay a hefty financial penalty.
A coop attorney works for the coop, plain and simple.
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In my case as a board member I have written correspondence to the lawyer asking for explanation of board presidents "law expertise" & it has been over two months & no response from lawyer. I guess our coop lawyer does not know that he works for the entire board of directors and the shareholders as a whole.
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Obviously, you did not read my paragraph from my original posting. This is the answer you are looking for. I have corrected some mistakes in quoting:
"Over the years, what I have objected from some ignorant (not to call them ILL-INTENDED board members) is their calls to the co-op counsel, insurance brokers or other professionals to consult [their] the particular board member's own point of view or TO raise issues that reflect their own point of view WITHOUT BEING DELEGATED BY THE BOARD TO DO SO. This is AS IMPRUDENT AS the PRESIDENT acting on his/her own. Unless a board member is empowered by the board to do the contacts and report back, individual actions send the signal of a weak, divided board or the wrong decision. Thus, to act as a board, all participate, all volunteer, all work in the measure of their talents and all live by the decisions of the majority; the minutes will reflect the desenting vote."
NOW, if you find that certain opinions of the president regarding legality are wrong, you challenge it in front of the other board members and request that the "legal opinion" be clarified with the co-op attorney. If you find the other board members to go with you, no big deal for the president to say, OKAY, let's consulted. WHO VOLUNTEERS to do the calling and report back to the board? Otherwise, to send an e-mail to the co-op counsel with the question with copy to all board members will do. If you have no e-mail, then the person who does have one will make copies of the co-op counsel's asnwer and distribute.
The case is closed!
AdC
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I don't think that the lawyer only represents the President by law - according to New York State Law - It is the board, not an individual that makes policy - which makes sense because then why would you need 9 people and a vote - Our lawyer says he represents the board - however that is not true
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Actually, this isn't correct.
The co-op's legal representative works for the entire Board. Generally, the Board will interact with the lawyer only through one person, in order to avoid confusion (and keep the bills low) -- but, for example, if the president and Board are at odds, and the president is in the minority, the legal agent must represent the majority's decision, not that of the president alone.
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First, the president is the speaker of the board, but has no other power than being the speaker and sign contracts on behalf of the board. Of course, the president is expected to lead, to provide vision and to PERSUADE. The president cannot make decisions on his/her own that amounts to tons of money, although in emergency situations and run of the mill issues, he/she will be approving routine work.
One thing I learned from our counsel is as follows: "The Board serves at the pleasure of the shareholders; the directors including the president serve at the pleasure of the board." In other words, a president gets the vote of confidence from the board and his/her function is to serve the board.
A president shows his/her ignorance by taking major responsibility on his/her shoulder on behalf of the board. A president must learn the VIRTUE of PRUDENCE. When big money is involved, and actions may be questioned, a president should use his/her INTELLIGENCE AND PRUDENCE to pause and read the above definition. THEREFORE, those who advocate for e-mails, telephone calls, etc. will find fertile ground here: the PRESIDENT will not only CONSULT via these methods of communications what board member think, but will call for a face-to-face meeting. WHY??? Because a PRUDENT president wants dialog, discussion and a VOTE or resolution of the board before diving into the pool.
Over the years what I have objected from some ignorant (not to call them ILL-INTENDED board members) is to call on their own counsel, insurance brokers or other professionals to consult their own their point of view or raise issues that reflects their own point of view. Thi is AS IMPRUDENT AS the PRESIDENT acting on his/her own. Unless a board member is empowered by the board to do the contacts and report back, individual actions send the signal of a weak, divided board or the wrong decision. Thus, to act as a board, all participate, all volunteer, all work in the measure of their talents and all live by the decisions of the majority; the minutes will reflect the desenting vote.
AdC
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Paid heed to this situation:
"The outgoing Board was ready to send an attoney's letter to the person about smoke and noise coming from his apt and decided to wait until the new elections. Now we have the problem shareholder on the Board.
Should we speak to the Board member first or send a letter? Can he even be on the Board if he is in violation of the house rules?"
1. Each time something like this happens nip it immediately. The worst thing boards do is do nothing. Silence has condemned the the "do nothing," "the nice guys/gals", "the uninvolved."
2. If the person was objectionable, bring it to the attention at a meeting, etc. Now, it is "tolerance" or become enemies. After all you all tolerated it for years and even allowed the person to be elected.
3. At this point, board members should discuss the issue openly with management as a witness and assume the consequences of how the person is going to take it.
4. If you are in majority, the person will have to comply. But probably will never cooperate and become adversarial and resentful.
Good luck!
AdC
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totally agree with AdC. This kind of behavior must be nipped in the bud, and shown early on that it is not acceptable. Now the board , and the building, seems to be held hostage to this outrageously inconsiderate neighbor!
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Just reporting back on new Board member with history of objectionable behavior. At our first Board meeting, the atmosphere was tense. No one wanted to lead the discussion about the noise and smoke (which has subsided considerably since he voted himself on the Board). A Board member took him outside before the meeting and seems to have gotten assurances of good-natured compliance. Could it be a new leaf? As new shareholders have moved into the building there has been a shift to Zero Tolerance and we think the Problem knows it. Also knows a lawyers letter was poised to go out. Any comments on how this was handled? Thanks all for your input on the situation.
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First, I don't see anything wrong with the independent accountant to be at the meeting and attempt to answer any questions that shareholders have, even if the questions are simple or his/her job may seem like snowballing the audience. In fact, in preparation for the meeting, we ask shareholders to bring bring their audited annual reports to the meeting to follow the accountant's explanations. Similarly, we have several copies on hand for distributiton.
Perhaps the accountant was a bit expressive and the results of the report merited ä glowing expression. However, the independent accountant should be able to conclude his/her presentation with an assessment of the operations and may even compare last years results with the current year. Finally, the independent accountant may be an independent observer of the elections who may certify the results.
Obviously, your president may have been too long and by now a new change in the guard is something desired. However, I cannot see how a president is elected by shareholders. After all shareholders elect board members and board members elect the directors of the corporation. Thus, if your president is there, it must be because the other board members vote for him.
AdC
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